Should I Take Money From My IRA to Avoid PMI on My New Mortgage? – Dave

I am 60. I have $200K in IRA. Just bought home 1 yr ago with minimum down on a 5% FHA loan. Value is $265K, balance is about the same. I’m paying ~$1650/mo including PMI/FHA insurance and property taxes at 1%.

With interest rates now in the 4% range for 30 year fixed, 3.75% for 20 year fixed and around 3.5% for 15 year fixed, I am planning to re-finance.

I would like to retire at 67 years old but have only the IRA and will have about $2600/mo from Social Security (between my wife and myself).

Should I simply refinance at the 4%/30 yr. fixed rate and drop to about $1480/mo including PMI?

OR, should I take enough out of IRA to put ~$53K on the loan to pay it down to where we no longer have PMI and with the lower balance, drop the payment to about $1230/mo (at 4%/30 year fixed)?

Dave

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